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US Warns Against Business Dealings With South Sudan Admist Plans for Economy Reform

The US warned firms on Monday about the hazards of doing business in South Sudan, the latest expression of dissatisfaction with rival leaders in the vulnerable country Washington once championed.

In a joint recommendation to US firms, the Departments of State, Commerce, and Labor warned of “the growing reputational, financial, and legal risks” associated with deals with South Sudan’s government or enterprises owned by officials’ families.

It urged US companies to conduct “due diligence on corruption and human rights issues” and to avoid deals with sanctioned South Sudanese officials. The transitional administration was chastised in the recommendation for “failure to adhere to its own laws,” especially openness over oil earnings.

“Business dealings could adversely impact US businesses, individuals, other persons and their operations in South Sudan and the region,” it said.

Following two decades of fighting with Sudan’s government in Khartoum, which is primarily Muslim and Arab, the majority-Christian South Sudan gained its independence in 2011. The United States played a crucial role in this diplomatic process.

The United States and other Western nations accuse President Salva Kiir and his then rival, and now, deputy, Riek Machar of delaying the execution of a 2018 pact so they could hold onto power as the new nation soon slid into civil conflict that claimed hundreds of thousands of lives.

The United States has stopped funding the peace process but has continued to provide South Sudan, one of the world’s poorest nations, with humanitarian supplies.

Meanwhile, according to a report by the East African, a news publication centered on East African reports, the government of South Sudan just announced that it is increasing its fiscal year expenditure plan by a third, despite Juba’s economic reforms receiving a dismal evaluation from Washington on Monday.

The national budget for this year is SSP2.1 trillion ($16.2 billion), which is a 33 percent increase over last year. President Salva Kiir signed it into law on Monday. Additionally, Juba intends to increase government worker pay by up to 400 percent, but more than two thirds of the allocated funds would be used for security, highlighting the nation’s ongoing struggle since it gained independence in 2011.

Source : Business Insider